Agents Say With Insurance Sales, Devil’s in the Details
by Mike DriscollFrom fighting in the streets of Athens and Bangkok to the volcano in Europe and the oil spill in the Gulf of Mexico, problems both natural and manmade this year have created uncertainty for international travel plans.
Have these troubles changed the perception of consumers historically wary of buying travel insurance? Various insurance vendors report sales are way up, so Travel Market Report checked with two seasoned professionals on the retail side for their perspectives down in the trenches.
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John Werner, president/COO of MAST Vacation Partners in Oak Brook Terrace, Ill., said all the recent disasters disrupted travel and were covered in the media extensively; both things led to more consumers willing to listen to insurance sales pitches. “With earthquakes and volcanic ash, the general news media has picked up the issue of travel insurance,” Werner said.
Last year, the consumer media seemed bent on running pieces on what a rip-off travel insurance was. It tied in with the money-saving mood of the vacation traveler in 2009. This year, those articles are rarely found, replaced by tales of bitter travelers who didn’t purchase insurance paying dearly for that decision.
The result? “More agents are getting more knowledgeable about the travel insurance product, not only to protect their clients but to protect themselves,” said Werner.
He said that even prior to the current spate of bad news, the travel insurance component had become a larger part of the typical agent’s sales process. “For a lot of the agents, it used to be an afterthought, but now more and more agents don’t have the volume airline ticket business,” said Werner. “The focus is not on air sales and visiting friends and relatives but on more expensive vacation travel. And that’s what needs to be insured.”
But with that comes more responsibility for agents to understand the different coverages from different insurance vendors for different problems.
In the case of volcanic ash, for instance, coverage varies from company to company. The company that is the preferred for Werner’s agency group considered the volcanic ash coverage ended once the airports reopened. “If [the volcano] were to flare up today, it’s considered a new weather situation for trip insurance,” he said. “We’re all spending more time understanding the policies and have to be careful because it can be confusing based on certain protections.”
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As Joan Papst of Travel Planning, Inc., Bluffton, S.C., noted, “Like everything else in this industry, insurance is constantly changing.” But being in the business for 40 years, she reports: “It’s not any more complicated today than insurance has always been. The coverage is always conditional. You’re always hoping that the client’s claim meets the condition covered.”
To Papst, some issues don’t change, one being that most travel agents don’t want to be insurance agents because of the complications. “One issue is always: should your client take private insurance or the tour operator’s insurance,” she said. “The first thing to ask yourself is if the tour company is solvent or in any danger of bankruptcy. I don’t work with companies that I think could possibly go bankrupt. But if there’s any doubt at all, it’s better taking independent insurance. It has been a long time since a major tour operator went under, but it has happened.”
Other factors come into play. For instance, Papst pointed out that some tour operators and some cruise lines only offer up to $10,000 in medical coverage, and that is simply not adequate for an elderly client traveling overseas. “Medicare does not cover you if you’re out of country, so $10,000 medical coverage is just not enough,” she said.
What brought it especially to her attention is a client approaching 80 years of age wanting to take a 35-day cruise in July followed by a 66-day cruise in January. “I knew of another lady, not my client, who got the $10,000 insurance for a land trip to Ireland,” recalled Papst. “She got pneumonia, spent time in the hospital, and her bill was $37,000. It doesn’t take much to go over $10,000 in a hospital, and many independent companies can offer you up to $100,000.”
However, Papst added that the benefit of the “cancel for any reason” attracts many clients into taking cruise line insurance.
And vendor policies can be a little inconsistent. “As soon as you think you know what their policy is, it changes,” reported Papst. “Some companies have changed policies two or three times in the past month, so what I knew yesterday isn’t always right. You’ve got to keep on top of the changes.”
With all these changes, sometimes clients require duplicate coverage — both vendor and independent insurance — for medical insurance coverage, making a complicated part of the sales process even more so. All that being said, one thing hasn’t changed for Papst in 40 years of selling insurance as a component of vacation trips: “Most clients still don’t want to bother with it. It’s amazing how they’ll think nothing is going to happen. Everyone should feel confident that their trip will be problem free, but if something should go wrong, it is important to have insurance.”
